Gas tax brings channel expansion into focus

The Alabama Legislature passed a quickly debated gas tax increase this week and the funding it is projected to generate will have a significant impact on the Mobile Shipping Channel.

Gov. Kay Ivey’s “Rebuild Alabama” plan is actually a suite of three bills, all of which sailed through the House of Representatives and the Alabama Senate during a special session called by the governor last week.

In all, Ivey’s plan will raise the state’s 18-cent fuel tax to 28 cents by 2021 and provide additional accountability over how the Alabama Department of Transportation allocates those dollars. Another provision sets the gas tax up to be automatically adjusted every two years based upon the National Highway Construction Cost Index beginning in 2023.

In addition to funding for state infrastructure projects, the increase is expected to generate $11.7 million to fund bond payments for an expansion at the Port of Mobile. A separate bill also authorizes the state to borrow up to $150 million to match the anticipated federal funds for the same project.

For the last four years, the Army Corps of Engineers has been evaluating a proposal to widen and deepen the 36-mile Mobile Shipping Channel to an overall depth of 50 feet. Once its study is complete, the Corps will submit a proposal for Congress to consider.

According to Jimmy Lyons, president of the Alabama State Port Authority (ASPA), the project is necessary to accommodate larger ships and to allow the current ships calling on Mobile to be safely filled to capacity in order to take advantage of economies of scale.

While routine dredging is funded entirely by the federal government, Alabama would share 25 percent of the cost of any deepening and widening project or risk losing tens of millions of dollars from Washington, D.C. According to Lyons, the funding the gas tax is expected to generate is likely the only way Alabama could find the funds to cover its share.

“It’s our only way to get the channel done, and that’s the only thing this money would be going toward,” Lyons said. “The Alabama Highway Finance Corp. will issue the bonds that would pay for the state’s share of roughly $150 million, and then the feds would be paying $250 million of the total $400 million estimated cost of the project.”

U.S. Sen. Richard Shelby was previously able to secure a legislative change that reduced Alabama’s share of the project from 50 percent to 25 percent. While he has not commented on the 10-cent gas tax increase directly, Shelby has expressed strong support for expanding the shipping channel and improving Alabama’s infrastructure.

“The deepening and widening of the Port of Mobile is a once-in-a-lifetime economic development opportunity and would be a game-changer for Alabama,” Shelby said in a statement to Lagniappe. “This undertaking has the ability to transform Mobile and our state’s economy for the next 100 years. I am glad to see this important project being highlighted.”

While the port obviously has a major impact on Mobile, Lyons said it also serves industries throughout Alabama. Based on a 2017 ASPA study, Lyons said the port generates about 150,000 direct, indirect and induced jobs in the state and has an estimated economic value of $25 billion.

Support for expanding the shipping channel has been fairly uniform in Montgomery as well. While there was some debate about the details of the gas tax increase, the bill authorizing the state to obtain bonds for its share of the channel expansion saw broad support in both houses.

Locally, though, dredging of the shipping channel and the possibility of expanding those activities has been a source of controversy for some time because of the impact some say it has on the Mobile Bay estuary and erosion on Dauphin Island.

For years, property owners and activists have maintained that dredging the shipping channel has significantly contributed to erosion on Dauphin Island by disrupting the natural western flow of sand in the littoral drift system and preventing it from reaching the shore.

It’s a charge the Corps has denied on several occasions. The issue is also the subject of a recent documentary released by the Mobile Bay and Alabama chapters of the Sierra Club environmental group. You can view “A Disrupted System: Alabama’s Disappearing Barrier Island” through Vimeo using the password: SierraClub.

Since 1999, the Corps has deposited “beach quality” dredge material in the Sand Island Beneficial Use Area (SIBUA), which is located several miles southeast of Dauphin Island in approximately 30 feet of water. Property owners have long advocated for a disposal site in shallower waters closer to the shoreline, especially if dredge activities were to expand.

The federal government already spends roughly $25 million annually dredging the channel, and the local engineers with the Corps have said disposing of dredge material in shallower water would increase costs because it would require specialized equipment.

At a March 7 meeting of the Sierra Club, Dauphin Island Mayor Jeff Collier said he supports the expansion of the shipping channel because of its economic benefit to the state. However, he also said it presents a great opportunity to establish a “more responsible disposal process.”

“We have a ship channel that fills it up with sand over time — sand that Dauphin Island desperately needs. We ought to be able to connect those dots,” Collier said. “The expansion is going to happen, and it’s going to bring a lot of good things, but it shouldn’t be one or the other. We should be able to have the economic benefits without devastating the downdrift areas.”

The Corps plans to place beach quality dredge material closer to Dauphin Island this year using a one-time, $4 million appropriation.

The Corps announced it will use an additional $4 million in the upcoming dredging season to expand the SIBUA approximately 3,305 acres to the northwest.

That will put dredge material closer to Dauphin Island while also increasing the disposal capacity for the Corps.

The extra capacity is needed because the original parameter of the SIBUA is filling up.

The Corps has acknowledged sand is moving out of the area at half the rate it’s being placed there, which opponents often cite as proof dredge material isn’t reaching Dauphin Island.

Glen Coffee, a former Corps biologist, has pushed for the Corps to change its dredge disposal practices for a number of years. While he’s happy to see the disposal area moved farther west this year, Coffee said there’s been no indication of a long-term shift.

“That’s like treating an infection and you only take one dose of medicine,” Coffee said. “You’re not going to get well.”